• 37% of small businesses will run out of cash  in under six weeks

  • 69% of businesses in leisure and hospitality expect their revenue to totally disappear

  • Collective small business revenue set to decline by 57% by  end of April

  • Government support needs to get into SME hands as soon as possible

 Tide, the UK’s leading business banking platform, has released new research today revealing the health of the UK’s small business community just weeks into the COVID-19 crisis.

Tide surveyed over 1,000 small business leaders (with between 0 and 49 employees) to understand the financial health of their businesses. Three in four (75%) businesses say they have been negatively affected by COVID-19 so far, and this looks set to worsen throughout April.

When asked about their expectations for their business’ revenue, 80% projected that their revenue will decline in April 2020, compared to April 2019. Over one in three (36%) expect their revenue to decline by more than 90%.

The industries expected to be worst hit are leisure and hospitality, with 64% expecting to see their revenue decline by 100%, followed by retail, with 38% expecting their revenue to totally disappear. Businesses in IT and Telecoms expect to be least impacted, with just under a quarter (23%) saying they don’t  expect to see any  decline in their revenue compared to April 2019.

If these expectations come to pass, Tide has calculated* that collective small business revenue (including businesses affected positively and negatively by COVID-19) will decline by around 57% over  the course of April 2020. This  builds on a 20% decline already observed on the Tide platform in the last seven days of March.

Considering small businesses contribute around £1.5 trillion per annum (37%) to UK private sector turnover, this is a worrying statistic. This decline would lead to a 21%  reduction in UK private sector turnover in April from small businesses alone (seasonally unadjusted). And this will add to declines in mid- and large sized business turnover.

Oliver Prill, Tide  CEO said: “As a banking platform dedicated to supporting small businesses, Tide is extremely concerned about the  health of the SME community at this time. From the conversations we have had with our 150,000 SME members we knew the situation was very tough, but this data has relieved just how tough it is, and how much harder it is likely to get for small businesses to weather this storm.

 “The government’s support for small businesses is highly welcome and needed, and it has the potential to make a huge difference in helping SMEs survive. There now needs to be a focus from the government, and other organisations involved in delivering financial support, to do everything possible to get the money into small businesses’ hands as soon as possible.”

Additionally, the research reveals that 37% of small businesses have cash reserves that will last them six weeks or less without government support. And 19% only have cash reserves that will last up to three weeks.

Time is of the essence to distribute government support quickly and efficiently.